Intrinsic value of Pieris Pharmaceuticals, Inc. - PIRS

Previous Close

$4.45

  Intrinsic Value

$10.45

stock screener

  Rating & Target

str. buy

+135%

Previous close

$4.45

 
Intrinsic value

$10.45

 
Up/down potential

+135%

 
Rating

str. buy

We calculate the intrinsic value of PIRS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  40
  62
  92
  134
  189
  260
  349
  458
  590
  745
  925
  1,131
  1,363
  1,622
  1,907
  2,219
  2,556
  2,918
  3,305
  3,716
  4,150
  4,607
  5,087
  5,589
  6,114
  6,661
  7,231
  7,824
  8,440
  9,081
Variable operating expenses, $m
  40
  62
  92
  134
  189
  260
  349
  458
  590
  745
  925
  1,131
  1,363
  1,622
  1,907
  2,219
  2,556
  2,918
  3,305
  3,716
  4,150
  4,607
  5,087
  5,589
  6,114
  6,661
  7,231
  7,824
  8,440
  9,081
Fixed operating expenses, $m
  25
  25
  26
  26
  27
  27
  28
  29
  29
  30
  30
  31
  32
  33
  33
  34
  35
  36
  36
  37
  38
  39
  40
  40
  41
  42
  43
  44
  45
  46
Total operating expenses, $m
  65
  87
  118
  160
  216
  287
  377
  487
  619
  775
  955
  1,162
  1,395
  1,655
  1,940
  2,253
  2,591
  2,954
  3,341
  3,753
  4,188
  4,646
  5,127
  5,629
  6,155
  6,703
  7,274
  7,868
  8,485
  9,127
Operating income, $m
  -25
  -25
  -26
  -26
  -27
  -27
  -28
  -29
  -29
  -30
  -30
  -31
  -32
  -33
  -33
  -34
  -35
  -36
  -36
  -37
  -38
  -39
  -40
  -40
  -41
  -42
  -43
  -44
  -45
  -46
EBITDA, $m
  -24
  -24
  -24
  -24
  -24
  -23
  -23
  -22
  -20
  -19
  -17
  -14
  -12
  -9
  -5
  -1
  3
  8
  13
  18
  24
  30
  36
  42
  49
  56
  64
  72
  80
  89
Interest expense (income), $m
  0
  0
  1
  4
  9
  15
  23
  34
  47
  64
  83
  106
  133
  164
  199
  238
  280
  327
  377
  431
  489
  551
  616
  684
  756
  831
  909
  991
  1,076
  1,165
  1,257
Earnings before tax, $m
  -25
  -26
  -30
  -35
  -42
  -51
  -62
  -76
  -93
  -113
  -137
  -165
  -196
  -231
  -271
  -314
  -362
  -413
  -468
  -526
  -589
  -654
  -724
  -796
  -872
  -952
  -1,034
  -1,120
  -1,210
  -1,303
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -25
  -26
  -30
  -35
  -42
  -51
  -62
  -76
  -93
  -113
  -137
  -165
  -196
  -231
  -271
  -314
  -362
  -413
  -468
  -526
  -589
  -654
  -724
  -796
  -872
  -952
  -1,034
  -1,120
  -1,210
  -1,303

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  123
  190
  284
  413
  582
  800
  1,074
  1,411
  1,815
  2,293
  2,847
  3,481
  4,195
  4,991
  5,869
  6,827
  7,864
  8,979
  10,169
  11,433
  12,769
  14,176
  15,653
  17,198
  18,813
  20,496
  22,249
  24,073
  25,970
  27,941
Adjusted assets (=assets-cash), $m
  123
  190
  284
  413
  582
  800
  1,074
  1,411
  1,815
  2,293
  2,847
  3,481
  4,195
  4,991
  5,869
  6,827
  7,864
  8,979
  10,169
  11,433
  12,769
  14,176
  15,653
  17,198
  18,813
  20,496
  22,249
  24,073
  25,970
  27,941
Revenue / Adjusted assets
  0.325
  0.326
  0.324
  0.324
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
Average production assets, $m
  5
  8
  12
  17
  24
  33
  44
  58
  74
  94
  117
  143
  172
  204
  240
  280
  322
  368
  416
  468
  523
  581
  641
  704
  770
  839
  911
  986
  1,063
  1,144
Working capital, $m
  -46
  -71
  -106
  -154
  -217
  -298
  -400
  -525
  -675
  -853
  -1,059
  -1,295
  -1,561
  -1,857
  -2,184
  -2,541
  -2,926
  -3,341
  -3,784
  -4,254
  -4,752
  -5,275
  -5,825
  -6,400
  -7,001
  -7,627
  -8,279
  -8,958
  -9,664
  -10,398
Total debt, $m
  18
  79
  164
  279
  432
  628
  874
  1,177
  1,541
  1,971
  2,470
  3,040
  3,683
  4,400
  5,190
  6,052
  6,985
  7,989
  9,060
  10,197
  11,400
  12,666
  13,995
  15,386
  16,839
  18,354
  19,932
  21,574
  23,281
  25,055
Total liabilities, $m
  111
  171
  256
  371
  524
  720
  967
  1,269
  1,634
  2,063
  2,562
  3,132
  3,776
  4,492
  5,282
  6,144
  7,078
  8,081
  9,152
  10,290
  11,492
  12,758
  14,087
  15,478
  16,931
  18,446
  20,024
  21,666
  23,373
  25,147
Total equity, $m
  12
  19
  28
  41
  58
  80
  107
  141
  182
  229
  285
  348
  420
  499
  587
  683
  786
  898
  1,017
  1,143
  1,277
  1,418
  1,565
  1,720
  1,881
  2,050
  2,225
  2,407
  2,597
  2,794
Total liabilities and equity, $m
  123
  190
  284
  412
  582
  800
  1,074
  1,410
  1,816
  2,292
  2,847
  3,480
  4,196
  4,991
  5,869
  6,827
  7,864
  8,979
  10,169
  11,433
  12,769
  14,176
  15,652
  17,198
  18,812
  20,496
  22,249
  24,073
  25,970
  27,941
Debt-to-equity ratio
  1.500
  4.140
  5.750
  6.760
  7.410
  7.850
  8.140
  8.350
  8.490
  8.600
  8.680
  8.730
  8.780
  8.810
  8.840
  8.860
  8.880
  8.900
  8.910
  8.920
  8.930
  8.930
  8.940
  8.950
  8.950
  8.950
  8.960
  8.960
  8.960
  8.970
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -25
  -26
  -30
  -35
  -42
  -51
  -62
  -76
  -93
  -113
  -137
  -165
  -196
  -231
  -271
  -314
  -362
  -413
  -468
  -526
  -589
  -654
  -724
  -796
  -872
  -952
  -1,034
  -1,120
  -1,210
  -1,303
Depreciation, amort., depletion, $m
  1
  1
  1
  2
  3
  4
  5
  7
  9
  11
  14
  17
  20
  24
  28
  33
  38
  43
  49
  55
  62
  68
  75
  83
  91
  99
  107
  116
  125
  135
Funds from operations, $m
  -24
  -25
  -29
  -33
  -39
  -47
  -57
  -69
  -84
  -102
  -123
  -148
  -176
  -207
  -243
  -281
  -324
  -369
  -419
  -471
  -527
  -586
  -648
  -713
  -782
  -853
  -927
  -1,004
  -1,085
  -1,169
Change in working capital, $m
  -17
  -25
  -35
  -48
  -63
  -81
  -102
  -125
  -151
  -178
  -206
  -236
  -266
  -296
  -327
  -357
  -386
  -415
  -443
  -470
  -497
  -524
  -549
  -575
  -601
  -626
  -652
  -679
  -706
  -734
Cash from operations, $m
  -7
  0
  7
  15
  24
  34
  45
  56
  67
  76
  83
  88
  90
  89
  84
  75
  62
  45
  24
  -1
  -30
  -62
  -99
  -138
  -181
  -226
  -275
  -326
  -379
  -435
Maintenance CAPEX, $m
  0
  -1
  -1
  -1
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -14
  -17
  -20
  -24
  -28
  -33
  -38
  -43
  -49
  -55
  -62
  -68
  -75
  -83
  -91
  -99
  -107
  -116
  -125
New CAPEX, $m
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -14
  -17
  -20
  -23
  -26
  -29
  -33
  -36
  -39
  -42
  -46
  -49
  -52
  -55
  -58
  -60
  -63
  -66
  -69
  -72
  -75
  -78
  -81
Cash from investing activities, $m
  -2
  -4
  -5
  -6
  -9
  -12
  -15
  -19
  -24
  -29
  -34
  -40
  -46
  -53
  -60
  -67
  -75
  -84
  -92
  -101
  -110
  -120
  -128
  -138
  -149
  -160
  -171
  -182
  -194
  -206
Free cash flow, $m
  -9
  -4
  2
  8
  15
  23
  30
  37
  43
  47
  49
  48
  44
  36
  24
  8
  -13
  -38
  -68
  -102
  -140
  -182
  -227
  -277
  -330
  -386
  -445
  -508
  -573
  -641
Issuance/(repayment) of debt, $m
  18
  60
  85
  115
  153
  196
  247
  303
  364
  430
  499
  570
  643
  717
  790
  862
  933
  1,003
  1,071
  1,138
  1,203
  1,266
  1,329
  1,391
  1,453
  1,515
  1,578
  1,642
  1,707
  1,774
Issuance/(repurchase) of shares, $m
  52
  33
  39
  48
  59
  72
  89
  109
  133
  161
  192
  228
  267
  311
  359
  410
  465
  524
  587
  653
  722
  795
  871
  951
  1,034
  1,120
  1,210
  1,303
  1,400
  1,500
Cash from financing (excl. dividends), $m  
  70
  93
  124
  163
  212
  268
  336
  412
  497
  591
  691
  798
  910
  1,028
  1,149
  1,272
  1,398
  1,527
  1,658
  1,791
  1,925
  2,061
  2,200
  2,342
  2,487
  2,635
  2,788
  2,945
  3,107
  3,274
Total cash flow (excl. dividends), $m
  61
  90
  126
  171
  226
  291
  366
  449
  540
  638
  741
  847
  955
  1,064
  1,172
  1,280
  1,386
  1,489
  1,590
  1,689
  1,785
  1,880
  1,973
  2,065
  2,157
  2,249
  2,342
  2,437
  2,534
  2,634
Retained Cash Flow (-), $m
  -52
  -33
  -39
  -48
  -59
  -72
  -89
  -109
  -133
  -161
  -192
  -228
  -267
  -311
  -359
  -410
  -465
  -524
  -587
  -653
  -722
  -795
  -871
  -951
  -1,034
  -1,120
  -1,210
  -1,303
  -1,400
  -1,500
Prev. year cash balance distribution, $m
  27
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  36
  57
  87
  123
  168
  219
  277
  340
  407
  477
  548
  619
  687
  753
  814
  870
  920
  965
  1,003
  1,036
  1,063
  1,085
  1,102
  1,114
  1,123
  1,129
  1,133
  1,134
  1,134
  1,133
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  35
  52
  75
  102
  130
  159
  187
  212
  234
  250
  260
  264
  261
  253
  239
  221
  200
  178
  154
  132
  110
  90
  72
  57
  44
  33
  24
  18
  12
  9
Current shareholders' claim on cash, %
  50.0
  39.5
  32.7
  28.0
  24.5
  21.8
  19.6
  17.8
  16.3
  14.9
  13.8
  12.8
  11.9
  11.0
  10.3
  9.6
  9.0
  8.4
  7.9
  7.5
  7.0
  6.6
  6.2
  5.9
  5.5
  5.2
  4.9
  4.7
  4.4
  4.2

Pieris Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company. The Company's pipeline includes immuno-oncology multi-specifics tailored for the tumor micro-environment, an inhaled Anticalin to treat uncontrolled asthma and a half-life-optimized Anticalin to treat anemia. Its Anticalins proteins are a class of low molecular-weight therapeutic proteins derived from lipocalins, which are naturally occurring low-molecular weight human proteins typically found in blood plasma and other bodily fluids. It is focused on developing three drug candidates, which include PRS-080, PRS-060 and PRS-300 series. Its PRS-080 is an Anticalin drug candidate targeting hepcidin. The Company's second Anticalin drug candidate, PRS-060, binds to the IL-4 receptor alpha-chain (IL-4RA), thereby inhibiting the actions of IL-4 and IL-13, two cytokines known to be mediators in the inflammatory cascade that causes asthma and other inflammatory diseases. PRS-343 is an Anticalin-based drug candidate.

FINANCIAL RATIOS  of  Pieris Pharmaceuticals, Inc. (PIRS)

Valuation Ratios
P/E Ratio -8.3
Price to Sales 31.9
Price to Book 7.7
Price to Tangible Book
Price to Cash Flow -13.7
Price to Free Cash Flow -12.8
Growth Rates
Sales Growth Rate 100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -66.7%
Ret/ On Assets - 3 Yr. Avg. -61.9%
Return On Total Capital -82.1%
Ret/ On T. Cap. - 3 Yr. Avg. -72.7%
Return On Equity -82.1%
Return On Equity - 3 Yr. Avg. -81.5%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -383.3%
EBITDA Margin - 3 Yr. Avg. -350%
Operating Margin -383.3%
Oper. Margin - 3 Yr. Avg. -336.7%
Pre-Tax Margin -383.3%
Pre-Tax Margin - 3 Yr. Avg. -350%
Net Profit Margin -383.3%
Net Profit Margin - 3 Yr. Avg. -350%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

PIRS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PIRS stock intrinsic value calculation we used $25 million for the last fiscal year's total revenue generated by Pieris Pharmaceuticals, Inc.. The default revenue input number comes from 0001 income statement of Pieris Pharmaceuticals, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PIRS stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for PIRS is calculated based on our internal credit rating of Pieris Pharmaceuticals, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Pieris Pharmaceuticals, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PIRS stock the variable cost ratio is equal to 100%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $24 million in the base year in the intrinsic value calculation for PIRS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Pieris Pharmaceuticals, Inc..

Corporate tax rate of 27% is the nominal tax rate for Pieris Pharmaceuticals, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PIRS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PIRS are equal to 12.6%.

Life of production assets of 8.5 years is the average useful life of capital assets used in Pieris Pharmaceuticals, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PIRS is equal to -114.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $11.522 million for Pieris Pharmaceuticals, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 54.151 million for Pieris Pharmaceuticals, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Pieris Pharmaceuticals, Inc. at the current share price and the inputted number of shares is $0.2 billion.

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